Taylor Kaspar Law

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Estate planning is the process of planning for incapacity or death, and we need it so that we don’t have undesired outcomes when we either get sick or pass away.

Though most people think of estate planning as something for older people, we all really need it from the time we are legal adults at age 18. Death is an “uncertain certainty” in the sense that everyone knows that it will happen to them at some point, but no one knows exactly when. Therefore, we want to see people doing various types of estate planning from the time they reach legal adulthood onward.

Of course, estate planning may look differently for an 18-year-old than it does for an older person. For an 18 year old, it might be little more than incapacity planning documents such as Powers of Attorney and Healthcare Directives. If a person that age desires, these documents will allow their parents to continue being “mom and dad” in a practical way throughout those early years of the person’s young adulthood. For instance, incapacity planning documents may allow parents to call their child’s college and get information on their health status if they are sick or other campus information. If the young person gets the flu and is incapacitated for a few days but can’t reach out to their parents, a Healthcare Directive might allow the parents to reach out to the school and, if need be, come and get their child and take them home until they recuperate.

In contrast, as we get older, there are many situations that may call for estate planning documents. For instance, let’s say a person is in a long-term relationship with someone that they aren’t legally married to, but with whom they share property. That requires carefully constructed estate planning documents so that if something happens to either person, the other won’t be left in the lurch.

If you have children, you will certainly need estate planning. Estate planning documents allow parents to make provisions for their children in the event that they die or are otherwise incapacitated as with a serious injury. In addition to making sure your minor children are provided for financially, estate planning documents also allow you to assign guardianship to a person you trust. This means that if anything happens to you, your chosen guardian will be able to legally step in and care for them in your stead.

As we move into the later stages of life, we want to make sure that our healthcare needs are being met by the people that we choose, not by the people that the courts choose. We also want to make sure that our financial needs are being met by people that we choose, not by children fighting over the estate that we may leave behind. Additionally, for most of us, we want to make sure that when we die, things are as seamless and easy as they possibly can be for our loved ones.

Is Estate Planning Just for What Happens When I Die, or Can Estate Planning Benefit Me During my Lifetime?

Estate planning can definitely benefit both you and your family members during your lifetime. When I talk to clients about estate and incapacity planning, I think about these benefits and the surrounding questions quite a bit.

For instance, can estate planning help during temporary moments of incapacity? These episodes don’t have to be catastrophic. If someone is in their early 30s, they are far more likely to become incapacitated over the next 10 years than they are to die during that time. For someone like that, estate planning can mean planning for those moments where they are perhaps laid up in the hospital temporarily, or even just out of town and unable to attend to a sensitive matter.

Those types of people need estate planning so that others can do work or act on their behalf. This can include financial transactions, healthcare decisions, and other types of decisions that are usually relegated exclusively to the individual.

How Early Should You Begin Estate Planning?

You should start estate planning as soon as you become an adult—so, as soon as you legally can. Usually, that’s at age 18. At that early age, estate planning is simply for your parents to be able to step in and help you out if you need them to.

I consult with a lot of young people about the potential pros and cons of this type of estate planning. Some young people going to college have never been away from their parents before, and need them to have more access to their lives than they might need as they grow and mature later on. I level with them and really flesh out what these estate planning documents entail. Do you want mom to be able to call the college? Do you want her to be able to talk to that professor? Do you want her to help you if you have a medical situation and you have to decide between getting an elective procedure or not, or getting a cast put on or not, or whatever the issue might be? These are the sort of questions that it is important to ask when explaining estate planning to younger people.

What are the Most Important Components or Documents That Should Be Part of Everyone’s Estate Plan?

The three most essential documents are included in what we like to call the estate planning trifecta. This is sort of a basic package estate plan, but it is very effective.

It includes:

  • A Will: A will, or “Last Will and Testament”, outlines exactly what you want to happen to your assets and property when you die. It can also include provisions for who will care for any minor or disabled children you might have in the event of your death or incapacitation.
  • A Power of Attorney: A Power of Attorney names a trusted person to take over your financial and property-related decisions in the event that you become incapacitated.
  • A Healthcare Directive: Sometimes called a Living Will or Advanced Medical Directive, a Healthcare Directive has several functions. It often names a trusted person to take over your medical decision-making in the event that you become incapacitated. It may also explicitly state your wishes when it comes to things like life support, and which types of life support you want to be administered (or not) in which types of situations.

Those three documents—a Will, a Power of Attorney, and a Healthcare Directive—should ideally be put in place for all people once they turn 18. It doesn’t matter how old or young you are, or how rich or poor you are. Everyone benefits from having these documents in place.

When it comes to documents outside of the estate planning trifecta, there are certainly other documents that I believe are good or necessary to have at certain ages and stages of life, depending on who you are and what your family situation is.

If you want to help your family avoid the probate process, you might want to start looking into probate avoidance tools and techniques that can be added to estate planning packages. Or perhaps you’re getting some life insurance, maybe you’re getting some annuities that have a beneficiary designation on them, maybe you’re doing some transfer on death deeds. There could be a lot of things you might do to add and supplement your will, power of attorney, healthcare directive trio. Many of these supplements call for the consideration of trust-based planning. Trusts can be used to avoid probate, but also to provide a level of asset protection to your children. This is as close as you can often come to ensuring that there will be some inheritance left behind that your children can receive.

I often use my life as an example. My kids are very young; right now, they are 6, 5, 3 and 1. If something were to happen to me before they turn 18, I have a trust in place that says that they don’t get all of their inheritance as soon as they turn 18. Rather, the trust ensures distribution of property, assets, and funds over a longer period of time. I don’t want them to have the burden of trying to figure out how to manage a large sum of money as an 18-year-old.

In general, my advice is that if you have young kids, or kids who have gone through a divorce, or kids who are not traditionally good with money, you might consider looking at trust-based planning. With a trust, you can lengthen those distributions and protect your assets for a longer period of time, so that the assets you hand down aren’t wasted or collected in a claim.

For more information on Estate Planning In Minnesota, an Estate Planning Strategy Session is your next best step. Get the information and legal answers you are seeking by calling (952) 222-7895 today.

Taylor Kaspar, Esq.

Call Now For A Case Evaluation
(952) 222-7895

Call Now To Discuss How We Can Help You Leave Your Legacy(952) 222-7895